NEW ORLEANS , Louisiana -LRB- CNN -RRB- -- Patrons at Mat and Naddie 's restaurant in New Orleans may start with mouth-watering shrimp and crawfish croquettes . Or if they are feeling a tad more adventurous , they might try the artichoke , sun-dried tomato and roasted garlic cheesecake .

Stephen Schwarz has received a grant and low-interest loan from the state to help keep his business going .

What diners probably do n't know is that in a down economy , it is a constant struggle for restaurant owner Stephen Schwarz to keep Mat and Naddie 's up and running .

`` I have n't gotten to the point where I have said , ` Oh my God , I 'm not going to make payroll this week , ' '' Schwarz says . `` I guess I am more conservative . I always want to keep a certain amount of cash in the bank . ''

Nothing has been easy in New Orleans since Hurricane Katrina .

Schwarz is one of the lucky ones . His restaurant is in the city 's uptown area , near the riverbend , for those familiar with the city 's quirky geography . It 's one of the few areas of the city that did not flood .

He had Mat and Naddie 's back up and running and turning out what he calls `` Modern Louisiana '' food just three weeks after the storm .

But in the past few years , a city that prides itself on amazing cuisine has seen a healthy spike in its number of restaurants .

Before Katrina , there were about 800 restaurants in New Orleans . Now , the number is closer to 1,000 .

`` I think eventually , there are going to be places that go out of business , '' Schwarz says . `` They 're going to have to ... unless we get more people down here , living down here back to the levels before the storm . '' Watch Schwarz describe the culinary competition in New Orleans ''

Tourists , volunteers and emergency workers have been among the patrons frequenting all those restaurants . But the recession is putting the brakes on the number of people with disposable income heading to New Orleans .

So entrepreneurs like Schwarz are trying to stay afloat .

`` It 's a matter of how much stamina we can have , and how long we can last before things turn around , '' he says . `` How long can I continue to be creative about how we do our business so that maybe we can get some infusion of cash somewhere else . ''

Schwarz also operates Michael 's Catering .

Before Katrina , it was a relatively small operation that provided a nice little amount of financial padding each month .

Things are different now .

`` In the last year , it really got to the point where catering is 40 percent of our business , '' Schwarz says . `` It is almost equal to what we do at dinner -LSB- at the restaurant -RSB- . Before , dinner was about twice the volume of catering . ''

At a recent charity event on the mezzanine level of a New Orleans hotel , Michael 's Catering was among 15 or so entities providing a taste of the city to patrons .

It was a way to get some exposure , but the food , which was pulled pork from a roasted pig , had to be mouthwatering .

`` It 's very important , because it really gets your name out there , '' says Krystan Hosking , catering manager for Michael 's .

And there was also pressure .

`` Word of mouth is very important , because if you get one bad review , there are tons of restaurants that people are just waiting to try , '' she says . `` So if somebody gives you a bad review , they are n't going to give you a second chance . ''

Schwarz has been creative coming up with the funds to stay in business .

This year , he received a $ 10,000 grant and a $ 40,000 low-interest loan through the state -- part of Louisiana 's recovery effort to keep small businesses up and running .

Unlike some areas of the country that have seen the economy collapse in a matter of weeks , Schwarz says New Orleans is coping with a gradual decline .

`` It 's going to mean that we are going to have to keep on somehow , keep our capital here , so that we can cover this slow eating-away of losses . '' Schwarz says .

Between the catering gig and the restaurant , Schwarz has about 28 full - and part-time employees .

Schwarz himself is a transplant . He came to visit about 30 years ago and never left .

He says he 's proud that New Orleans residents tend to turn their backs on chain restaurants . But just because Mat and Naddie 's has been a presence near the riverbend for a generation is no guarantee it 'll be there after the recession .

`` Even if we do go out of business , '' Schwarz says , `` or if a lot of places like us go out of business , I hope that the memory of the people who live here , or their memory of what they like , will stay with them -- and those places will come back . ''

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New Orleans has seen its number of restaurants increase since Hurricane Katrina

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Stephen Schwarz says it 's a constant struggle to keep his restaurant up and running

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Recession reducing number of people with disposable income heading to the city

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Schwarz has received a grant , low-interest loan as part of state 's recovery effort